The Case for a European Banking Charter

Martin Cihak () and Jörg Decressin

No 2007/173, IMF Working Papers from International Monetary Fund

Abstract: Most financial institutions in the European Union (EU) are still based in one country, but a number of large financial institutions (LCFI) have systemic cross-border exposures. The paper explains how, despite much progress, nationally-segmented supervisory frameworks and national accountability for financial stability hinder optimization across borders of banks' operations and efficient and effective LCFI supervision. A full-fledged EU-level prudential regime that operates along-side national regimes--a European Banking Charter (EBC)--could harness market forces to establish a level playing field for financial sector competition, while plugging some significant gaps in Europe's financial stability framework without concentrating excessive powers.

Keywords: WP; insolvency regime; prudential regime; financial institution; EU country; EBC regime; member state; European Union; Financial System; Financial Stability; Banking Charter; LCFI host country activity; EBC proposal; Financial sector stability; Deposit insurance; Solvency; Competition; Europe (search for similar items in EconPapers)
Pages: 34
Date: 2007-07-01
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Citations: View citations in EconPapers (20)

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